Oct

Paper Trading Again

Written by Neil Galloway

I've started paper trading again. I'm always interested in the stock markets and I wanted to prove out if I could find a system that works for "me".

My doubts are that I want to spend too little time on it so it may be too "lazy" a system and it isn't really possible to earn money off it consistently.

Criteria

Basically, I have a full-time job, but do have time in the evenings (as I find trading super interesting) to do a bit of reading and check up on things. My goal is to have a system that has the following objectives:

No more than an hour a day of my time (once system is developed...will put in more effort for first few months).

I cannot conflict with my employer. So do it after work so it would be looking at end of day data. With trades and stops being inputted in the off hours.

Trading trends with a goal of not holding a stock for more than a month (unless that trend still looks good of course...but I want to see good movement within the month). Otherwise I consider it a failure and will get out of it.

Long and short trades.

Wouldn't risk anymore than 1-2% of capital on any trade (so stop out with commissions no more than 1-2% of total account size). I realize that stock could gap overnight and I would get burned occasionally.

Tracking Progress

I read a book called Trading Your Way to Financial Freedom which provides useful metrics and tools to evaluate your system. I created a spreadsheet to track this and I'm also using the Stockscores trading simulator to handle my fake trades. It allows you to enter stops, comments, and records performance data of your trading.

Update: October 30th, 2010

I have posted my summary of results and a link to the paper trading spreadsheet I keep in it.

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Category: Investing

Original Post: Friday, October 1st, 2010

1 Comments

Wes Says:
2010-10-01 11:08:54
I would recommend https://www.thinkorswim.ca/ for your adventure. They have a paper trading account that is full featured, and allows you to use their amazing trading platform.

You can still paper trade, and the people at TOS will keep track of all your statistics, and you can make use of more complicated order types (Stop-Limit and Trailing Stop Loss) and you can even develop your own indicators to show when to buy and sell (or short) using their Thinkscript.

Just my opinion